Investor Presentation: February 18, 2015

Transcription

Investor Presentation: February 18, 2015
NYSE Stock Symbol:
Common Dividend:
Basic Shares Outstanding:
Internet Address:
http://www.eogresources.com
EOG
$0.67
548 Million
Investor Relations Contacts
Cedric W. Burgher, SVP Investor and Public Relations
(713) 571-4658, [email protected]
David J. Streit, Director IR
(713) 571-4902, [email protected]
Kimberly M. Ehmer, Manager IR
(713) 571-4676, [email protected]
Copyright; Assumption of Risk: Copyright 2015. This presentation and the contents of this presentation have been copyrighted by EOG Resources, Inc. (EOG). All rights reserved. Copying of the presentation is
forbidden without the prior written consent of EOG. Information in this presentation is provided "as is" without warranty of any kind, either express or implied, including but not limited to the implied warranties of
merchantability, fitness for a particular purpose and the timeliness of the information. You assume all risk in using the information. In no event shall EOG or its representatives be liable for any special, indirect or
consequential damages resulting from the use of the information.
Cautionary Notice Regarding Forward-Looking Statements: This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, including, among others, statements and projections regarding EOG's future financial position, operations,
performance, business strategy, returns, budgets, reserves, levels of production and costs, statements regarding future commodity prices and statements regarding the plans and objectives of EOG's management for
future operations, are forward-looking statements. EOG typically uses words such as "expect," "anticipate," "estimate," "project," "strategy," "intend," "plan," "target," "goal," "may," "will," "should" and "believe" or the
negative of those terms or other variations or comparable terminology to identify its forward-looking statements. In particular, statements, express or implied, concerning EOG's future operating results and returns or
EOG's ability to replace or increase reserves, increase production, generate income or cash flows or pay dividends are forward-looking statements. Forward-looking statements are not guarantees of performance.
Although EOG believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any
of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, EOG's forward-looking statements may be affected by known, unknown or currently unforeseen risks, events or
circumstances that may be outside EOG's control. Important factors that could cause EOG's actual results to differ materially from the expectations reflected in EOG's forward-looking statements include, among others:
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the timing, extent and duration of changes in prices for, and demand for, crude oil and condensate, natural gas liquids, natural gas and related commodities;
the extent to which EOG is successful in its efforts to acquire or discover additional reserves;
the extent to which EOG is successful in its efforts to economically develop its acreage in, produce reserves and achieve anticipated production levels from, and optimize reserve recovery from, its existing and future
crude oil and natural gas exploration and development projects;
the extent to which EOG is successful in its efforts to market its crude oil, natural gas and related commodity production;
the availability, proximity and capacity of, and costs associated with, appropriate gathering, processing, compression, transportation and refining facilities;
the availability, cost, terms and timing of issuance or execution of, and competition for, mineral licenses and leases and governmental and other permits and rights-of-way, and EOG's ability to retain mineral licenses
and leases;
the impact of, and changes in, government policies, laws and regulations, including tax laws and regulations; environmental, health and safety laws and regulations relating to air emissions, disposal of produced
water, drilling fluids and other wastes, hydraulic fracturing and access to and use of water; laws and regulations imposing conditions or restrictions on drilling and completion operations and on the transportation of
crude oil and natural gas; laws and regulations with respect to derivatives and hedging activities; and laws and regulations with respect to the import and export of crude oil, natural gas and related commodities;
EOG's ability to effectively integrate acquired crude oil and natural gas properties into its operations, fully identify existing and potential problems with respect to such properties and accurately estimate reserves,
production and costs with respect to such properties;
the extent to which EOG's third-party-operated crude oil and natural gas properties are operated successfully and economically;
competition in the oil and gas exploration and production industry for employees and other personnel, facilities, equipment, materials and services;
the availability and cost of employees and other personnel, facilities, equipment, materials (such as water) and services;
the accuracy of reserve estimates, which by their nature involve the exercise of professional judgment and may therefore be imprecise;
weather, including its impact on crude oil and natural gas demand, and weather-related delays in drilling and in the installation and operation (by EOG or third parties) of production, gathering, processing, refining,
compression and transportation facilities;
the ability of EOG's customers and other contractual counterparties to satisfy their obligations to EOG and, related thereto, to access the credit and capital markets to obtain financing needed to satisfy their
obligations to EOG;
EOG's ability to access the commercial paper market and other credit and capital markets to obtain financing on terms it deems acceptable, if at all, and to otherwise satisfy its capital expenditure requirements;
the extent and effect of any hedging activities engaged in by EOG;
the timing and extent of changes in foreign currency exchange rates, interest rates, inflation rates, global and domestic financial market conditions and global and domestic general economic conditions;
political conditions and developments around the world (such as political instability and armed conflict), including in the areas in which EOG operates;
the use of competing energy sources and the development of alternative energy sources;
the extent to which EOG incurs uninsured losses and liabilities or losses and liabilities in excess of its insurance coverage;
acts of war and terrorism and responses to these acts;
physical, electronic and cyber security breaches; and
the other factors described under Item 1A, “Risk Factors”, on pages 13 through 20 of EOG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and any updates to those factors set forth in EOG's
subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
In light of these risks, uncertainties and assumptions, the events anticipated by EOG's forward-looking statements may not occur, and, if any of such events do, we may not have anticipated the timing of their occurrence
or the extent of their impact on our actual results. Accordingly, you should not place any undue reliance on any of EOG's forward-looking statements. EOG's forward-looking statements speak only as of the date made,
and EOG undertakes no obligation, other than as required by applicable law, to update or revise its forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated
circumstances or otherwise.
Oil and Gas Reserves; Non-GAAP Financial Measures: The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose not only “proved” reserves
(i.e., quantities of oil and gas that are estimated to be recoverable with a high degree of confidence), but also “probable” reserves (i.e., quantities of oil and gas that are as likely as not to be recovered) as well as
“possible” reserves (i.e., additional quantities of oil and gas that might be recovered, but with a lower probability than probable reserves). Statements of reserves are only estimates and may not correspond to the
ultimate quantities of oil and gas recovered. Any reserve estimates provided in this presentation that are not specifically designated as being estimates of proved reserves may include "potential" reserves and/or other
estimated reserves not necessarily calculated in accordance with, or contemplated by, the SEC’s latest reserve reporting guidelines. Investors are urged to consider closely the disclosure in EOG’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2014, available from EOG at P.O. Box 4362, Houston, Texas 77210-4362 (Attn: Investor Relations). You can also obtain this report from the SEC by calling 1-800-SEC-0330
or from the SEC's website at www.sec.gov. In addition, reconciliation and calculation schedules for non-GAAP financial measures can be found on the EOG website at www.eogresources.com.
Focus on Returns
Maximize Return on Capital Invested in 2015
- Drill Best Plays: Eagle Ford, Delaware Basin and Bakken
- Defer Well Completions
Focus on Reducing Costs, Improving Well Productivity
Maintain Strong Balance Sheet
Take Advantage of Opportunities to Add Drilling Inventory
- Leasehold, Farm-In, Tactical Acquisitions
Position EOG to Resume Peer-Leading Growth
When Oil Prices Recover
EOG_0215-1
Operations
31% YOY Crude Oil Production Growth and 17% Total Company Production Growth
- Three-Year CAGR 37% Crude Oil Growth
Increased Total Company Net Proved Reserves 18%
Achieved 249% Total Proved Reserve Replacement* at $13.25/Boe Finding Cost*
Identified >2x as Many New Well Locations as Drilled in 2014
- ≈1,600 Net Locations in Eagle Ford From Downspacing
- ≈700 Net Locations From Four Rockies Plays
- Announced Delaware Basin Second Bone Spring Sand and Wolfcamp Oil Window
Encouraged by Bakken Downspacing Results and Three Forks Exploration
Well Productivity Improvements Achieved With Enhanced “EOG Completions”
2014 Financials**
Delivered 16% ROE and 14% ROCE
- Greater Than Average of Majors, Integrateds and Independent E&Ps
Strong Profit and Cash Flow Growth vs 2013
- Grew Non-GAAP EPS 20% and Discretionary Cash Flow 14%
Delevered Balance Sheet While Growing Production
Increased Dividend Rate 79%
* Reserve replacement ratio and finding costs before revisions due to price. See reconciliation schedules.
** Certain metrics reflected are ‘Adjusted.’ See reconciliation schedules.
EOG_0215-2
Organic Growth Leader
Exploration and Technology Focus
- Core Competency and Sustainable Competitive Advantage
Exploration
- Generate New Plays Internally
• Capture Premier Acreage
• Early-Mover Strategy Drives Low Leasing Costs
- Identify Additional Targets in Existing Plays
Technology Application
- “EOG Completions”
In-House Completion Design and Innovation
- Increase Drilling Density/Downspacing to Maximize NPV
- Reduce Per-Unit Operating Costs
Inventory Growing in Both Size and Quality
- Added ≈2,300 Net Drilling Locations 2014
2x 2014 Drilling Program
- 2015 Drilling Program Can Produce Attractive Returns at Low Oil Price
Efficient and Innovative Operator
- Self-Sourced Sand Reduces Completion Costs
- EOG Midstream Infrastructure Provides Market Flexibility
Rate-of-Return Focus Drives Shareholder Value and Growth
EOG_0215-3
60%
35%
Powder River Basin
Midland Basin Wolfcamp
25%
15%
Wyoming DJ Basin
Direct ATROR* at Flat $65 Oil
Direct ATROR* at Flat $55 Oil
Eagle Ford
Bakken/Three Forks
Delaware Basin Leonard
Delaware Basin Wolfcamp Oil and Combo
Delaware Basin 2nd Bone Spring Sand
* Direct ATROR
Based on cash flow and time value of money:
Excludes Indirect Capital:
- Estimated Future Commodity Prices and Operating Costs
- Gathering, Processing and Other Midstream
- Costs Incurred to Drill and Complete a Well
- Land, Seismic, Geological and Geophysical
* See reconciliation schedules. Oil price is at the wellhead.
EOG_0215-4
Play
Minimum
Locations*
Drilling
Years**
5,500
11
580
7
1,600
40
Eagle Ford
Bakken/Three Forks
Delaware Basin Leonard
Delaware Basin 2nd Bone Spring Sand
Evaluating
Delaware Basin Wolfcamp
1,100
75
DJ Basin
460
12
Powder River Basin
275
8
Midland Basin Wolfcamp
500
50
≈ 10,000
>15 Years of Drilling
* Number of remaining net wells as of January 1, 2015. Assumes no further downspacing, acreage additions or enhanced recovery.
** Assumes 2014 number of wells held flat.
EOG_0215-5
ROCE**
13.7%
16.4%
15.6%
12.4%
14.1%
10.5%
13.3%
12.4%
1
2013
2
2014E
9.1%
5.5%
1
2013
Majors
EOG*
3.7%
E&P
Integrateds
Majors
EOG*
4.3%
E&P
Integrateds
Majors
EOG*
3.4%
E&P
Integrateds
Majors
EOG*
7.9%
E&P
12.4%
Integrateds
13.7%
ROE**
2
2014E
* EOG actuals. Also see EOG reconciliation schedules.
** Source: Company filings and Goldman Sachs, February 2015 estimates. Majors: BP, CVX, RDS, TOT, XOM. Integrateds: CP, HES, MRO, MUR, OXY.
E&Ps: APC, APA, CHK, DVN, NBL, NFX, PXD
EOG_0215-6
Gathering, Processing
and Other
Exploration and
Development Facilities
$8.3 Bn
$0.7
Exploration and
Development
$1.0
$4.9-$5.1 Bn
$0.4
$0.6
$6.6
$4.0
2014
2015*
≈80% of 2015* Capex Going to Top Plays: Eagle Ford, Delaware Basin and Bakken
* Based on full-year estimates as of February 18, 2015, excluding acquisitions.
EOG_0215-7
 ATROR**
+30%
Benefit of Delaying Well Completion
Six Months at Various Prices
+25%
+20%
+15%
+10%
+5%
+0%
-5%
$50
$55
$60
$65
$70
$75
Oil Price After Six Months*
* $45 oil price first six months. Based on Eagle Ford West Type Well
** See reconciliation schedule.
EOG_0215-8
Increase in Rate of Return by Deferring Completion
Even if Oil Price Does Not Recover for 24+ Months
ATROR**
15%
10%
5%
0%
6
9
12
15
18
21
24
Months of Deferred Completion*
* $45 oil price until completion, then $65 thereafter. Note: Based on Eagle Ford West Type Well.
** See reconciliation schedule.
EOG_0215-9
Peak 30-Day Rate of Top 20
“Thousand Club*” Contributors
2014 Well Count of Top 20
“Thousand Club*” Contributors
250
2,000
200
1,500
150
1,000
100
500
50
0
0
EOG
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
2,500
Peak Oil
Peak Gas
EOG
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
Boed
Total Well Count
* Source: Bernstein Research. Thousand Club includes wells with 30-day rate over 1,000 Boepd in 2014.
Peer Group: APC, AR, BHP, CHK, COG, COP, CXO, DVN, ECA, EQT, EXC, HES, HK, MRO, PXD, ROSE, SM, TOU and XOM.
EOG_0215-10
ATROR*
100%
Higher Rate of Return at $65 Oil Than at $95 Oil in 2012
75%
2015
50%
2012
25%
0%
$45
$55
$65
$75
$85
$95
Oil Price
* See reconciliation schedule.
EOG_0215-11
80
70
60
50
40
30
20
10
0
EOG
Co. 1
Co. 2
Co. 3
Co. 4
Co. 5
Co. 6
Co. 7
Co. 8
Co. 9
Peer Co. 10 Co. 11 Co. 12 Co. 13 Co. 14
Avg
Source: First Call, Company Reports. Employee count YE 2013.
Peer Group: APA, APC, CHK, CLR, CXO, DNR, DVN, ECA, MRO, NBL, NFX, PXD, WLL and XEC.
EOG_0215-12
$14
EOG Maintains Stable LOE
Despite Rising Liquids Mix
$12
$10
LOE/Boe
EOG
Peers’ 2013 LOE
$8
2011
$6
2014
2010
2012
2013
$4
$2
$0
0%
10%
20%
30%
40%
50%
60%
70%
80%
Liquids Production
Source: Company filings.
Peers: APA, APC, CHK, CLR, CXO, DVN, MRO, NBL, NFX, PXD, RRC and XEC.
EOG_0215-13
Committed to the Dividend
$0.70
$0.67
Increased Dividend Twice in 2014
16 Dividend Increases in 15 Years
$0.60
$0.50
$0.50
$0.40
$0.38
$0.29
$0.30
$0.31
$0.32
2010
2011
$0.34
$0.26
$0.18
$0.20
$0.12
$0.10
$0.03
$0.04
$0.04
$0.04
$0.05
1999
2000
2001
2002
2003
$0.06
2004
$0.08
$0.00
2005
2006
2007
2008
2009
2012
2013
2014*
2014**
Note: Dividends adjusted for 2-for-1 stock splits effective March 1, 2005 and March 31, 2014.
* Indicated annual rate effective April 2014.
** Indicated annual rate effective October 2014.
EOG_0215-14
Total Company Net Proved Reserves Increased 18% to 2.5 BnBoe
Total Company Net Proved Liquids Reserves Increased 26% to 1.6 BnBbls
- Liquid Reserves 64% of Total Reserves
Reserve Replacement Ratio* Before Revisions Due to Price 249% at Cost
of $13.25 per Boe
Total Company Liquids Reserve Replacement* 344%
- Liquids Comprise 79% of Drilling Reserve Adds in North America
Outstanding All-in Reserve Replacement Costs* ($/Boe)
- U.S. Net Before Revisions Due to Price
- Total Company Before Revisions Due to Price
$12.68
$13.25
* See reconciliation schedules.
EOG_0215-15
Largest Oil Producer and Acreage Holder in the Eagle Ford
- 15 Rigs Operating for 2015
- Completed 534 Net Wells in 2014; Plan ≈345 in 2015
San Antonio
Multi-Well Pad Development
- Higher Capital Productivity
- Lumpy Production Profile
Crude Oil
Window
Continue to Enhance Completion Techniques in West
- 8% Increase In 90-Day Cumulative Production in 2014
Added 11M Top-Quality Acres in Oil Window; <$2M Per Acre
Wet Gas
Window
Dry Gas
Window
Laredo
Acreage >80% Held by Production
- Target >90% YE 2015
Korth Unit 6H–9H 3,955 to 5,480 Bopd IP Rate
0
Fewer Lease Retention Obligations
25 Miles
EOG 624,000 Net Acres
561,000 Net Acres in Oil Window
2015 Operations
Expanding Use of Advanced “EOG Completions”
Corpus Christi
Gas
12%
NGLs
10%
Oil
78%
EOG Self-Sourced Sand Lowers Costs and Increases Efficiencies
- Lowers Well Costs by $500M vs. Third-Party Sources
$5.7MM CWC with Advanced Completions and Longer Laterals
Current Production Mix
EOG_0215-16
Improving Well Productivity*
(Mbo)
(Mbo)
70
70
60
60
2014
2013
50
40
2012
2011
30
20
10
Cumulative Oil Production
Cumulative Oil Production
Eagle Ford West Wells
Average Cumulative Crude Oil Production*
High-Density Completion
39%
Increase
50
40
30
20
Early 2014 Completion
10
0
0
0
10
20
30
40
50
60
Producing Days
70
80
90
0
10
20
30
40
50
60
Producing Days
* Normalized to 5,300-foot lateral.
EOG_0215-17
Completed Well Cost*
($MM)
Average Drilling Days
(Spud-to-TD)
7.2
14.2
6.2
6.1**
5.7
10.9
8.9
4.3
2012
2013
2014
2015 Plan
2012
2013
2014
Record
* Normalized to 5,300’ lateral. CWC = Drilling, Completion and Well-Site Facilities.
** Initiated High-Density Completions.
EOG_0215-18
Brushy Canyon
Net to EOG*
Texas
Red Hills
New Mexico
Leonard A
Leonard B
Leonard/
Bone Spring
High ROR Oil Play
- Spacing Tests Underway
550 MMboe
Over-Pressured Oil Play
- Strong Initial Tests
Evaluating
4,800’
1st Bone Spring
2nd Bone Spring
3rd Bone Spring
Wolfcamp
Upper Wolfcamp
Middle Wolfcamp
Over-Pressured High ROR
Oil and Combo Play
- Spacing Tests Underway
800 MMboe
8 Rigs 2015
Lower Wolfcamp
* Estimated potential reserves, not proved reserves.
EOG_0215-19
Confirmed Highly Over-Pressured Oil Window in Northern Delaware Basin
- Oil Mix Rises to 50%
- Economics Competitive with Other EOG Oil Plays
Focused on Best 140,000 Net Acres with Multiple Pay Zones
- 90,000 Net Acres in Oil Play; 50,000 Net Acres in Combo Play
- >1,100 Net Drilling Locations
NGLs
24%
Oil
50%
Gas
26%
Gas
Typical Northern 36%
Wolfcamp Oil Well
Typical Combo Well
- 4,500’ Lateral
- EUR 900 MBoe, Gross; 700 MBoe, NAR
- $7.0 MM CWC*
NGLs
33%
Estimated Reserve Potential** 800 MMBoe, Net to EOG
Oil
31%
Gas
36%
Completed 19 Net Wells in 2014; Plan 26 in 2015
- Testing 750’ Spacing Pattern in Same Zone
Typical Reeves County
Wolfcamp Combo Well
Recent Combo Well Results are Strong
State Harrison Ranch 57 #1501H
State Harrison Ranch 57 #2101H
State Apache 57 #202H
Lateral
4,900’
4,700’
4,800’
County
Reeves
Reeves
Reeves
IP Rate
Bopd
1,610
1,510
2,025
30-Day Rate
Bopd Boepd
1,235
2,330
1,005
1,825
1,330
2,235
* CWC = Drilling, Completion and Well-Site Facilities.
** Estimated potential reserves, not proved reserves. Assumes estimated 2% - 3% recovery factor and includes 40 MMBoe of proved
reserves booked at December 31, 2014.
EOG_0215-20
90,000 Net Acres Prospective in Northern Delaware Basin
- Moving Into Full Development in 2015
- Largest Relative Increase in Capital in 2015
Completed 3 Operated Net Wells in 2014
- Plan to Complete 37 Net Wells in 2015
- Wells Producing from 1,270 - 1,825 Bopd
- API ≈ 44°
Typical Well
- EUR ≈ 500 MBoe/Well, Gross
- $6.5 MM CWC*
- 4,500’ Lateral
NGLs
14%
Gas
16%
Oil
70%
2nd
Typical Red Hills
Bone Spring Sand Well
Integrating Self-Sourced Sand
* CWC = Drilling, Completion and Well-Site Facilities.
EOG_0215-21
Advanced Completions Driving Higher Production from Tighter Spaced Wells
- 90-Day Cumulative Production Up 17% in 2014
80,000 Net Acres
Estimated Reserve Potential* 550 MMBoe, Net to EOG
Typical Well
- 500 MBoe EUR/Well, Gross; 400 MBoe, NAR
- $5.5 MM CWC**
- 4,400’ Lateral
NGLs
26%
Gas
24%
Oil
50%
Typical Leonard
Well
>1,600 Net Drilling Locations in A and B Zones
Completed 18 Net Wells in 2014; Plan 23 in 2015
- Identified Optimal Target Zones and Completion Designs
- Testing Development Spacing Patterns as Close as 300’
* Estimated potential reserves, not proved reserves. Includes 110 MMBoe of proved reserves booked at December 31, 2014.
** CWC = Drilling, Completion and Well-Site Facilities.
EOG_0215-22
Cumulative Crude Oil Production*
Average Well Spacing
(Feet)
(Mbo)
Cumulative Oil Production
60
1,030
50
2014
910
2013
2012
2011
40
30
835
560
20
10
0
0
10
20
30
40
50
60
70
80
90
2011
2012
2013
2014
Producing Days
* Normalized to 4,500-foot lateral.
EOG_0215-23
Optimizing Completion Formula Across Field and Within
Laterals of Single Wells
Canada
Stanley, ND
State Line
Bakken Core ≈ 90,000 Net Acres
- Antelope Extension ≈ 20,000 Net Acres
Encouraging Results on 700’ Spacing in the Core
- Testing 500’ and 300’ Spacing
- Evaluating Production Profiles
- Recent 700’ Pattern: 1,000 to 1,900 Bopd IP Rate
Bakken Lite
Elm
Coulee
Bakken Core
Bakken
Subcrop
Parshall 1-36H
Discovery
Well
Antelope
Extension
Completed Well Cost Down 11% in 2014 with New Completions
- 2014 Average $9.3 MM; Record $8.0 MM (10,000’ Lateral)
- Spud-to-TD Now 10 Days vs 16 in 2013
2015 Operations
20 Miles
EOG Acreage – Bakken/Three Forks
Bakken Oil Saturated
Gas
2%
NGLs
6%
Gas
11%
Focus on Bakken Core; 3 Rigs
Complete ≈25 Net Wells in 2015 vs 59 Net Wells in 2014
NGLs
11%
Oil
92%
Oil
78%
EOG Self-Sourced Sand Now Fully Integrated
Core Well
Antelope Well
Note: 219 MMBoe proved reserves in Bakken/Three Forks booked at December 31, 2014.
EOG_0215-24
Average Completed Well Cost*
($MM)
Average Drilling Days
(Spud-to-TD*)
22.7
10.5
10.4
9.3
16.1
8.2
12.0
10.4
7.1
2012
2013
2014
2015 Plan
2012
2013
2014
4Q14
Record
* Normalized to 10,000’ lateral. CWC = Drilling, Completion and Well-Site Facilities.
EOG_0215-25
Play
Marcellus, Bradford County
Net
Acres
46,000
Haynesville
143,000
Eagle Ford
63,000
Barnett
Type
Gas
Gas and Combo
Gas
298,000
Gas and Combo
94,000
Gas and Combo
S. Texas Frio/Vicksburg
195,000
Gas and Combo
Horn River
127,000
Gas
Uinta
Acreage Holds Option Value for Natural Gas Price Recovery
EOG_0215-26
Trinidad and Tobago
Trinidad
ATLANTIC
OCEAN
Expect Stable Production in 2015
TRINIDAD
4(a)
Drill 2 Net Wells to Maintain Deliverability
U(a)
U(b)
SECC
VENEZUELA
United Kingdom
East Irish Sea (Conwy)
- First Production 3Q 2015
- Estimated Peak Production – 20 MBopd, Net
United Kingdom
East
Irish
Sea
NORTH
SEA
EOG_0215-27
Maintain Low Net Debt-to-Total Cap Ratio
- Credit Ratings – Moody’s A3 / S&P ASuccessful Efforts Accounting
Zero Goodwill
$4.1 Billion in Available Liquidity
- $2.1 Billion Cash at December 31, 2014
- $2.0 Billion Credit Facility – Undrawn at December 31, 2014
EOG Reserves Within 5% of Independent Engineering Analysis
Prepared by DeGolyer and MacNaughton
- 27 Straight Years
- Reviewed 76% of Proved Reserves for 2014
EOG_0215-28
4.5
4.0
3.5
3.0
2.5
2.0
1.5
1.0
0.5
0.0
Co. 2 Co. 1 Co. 8 Co. 3 Co. 5 Co. 4 Co. 9 Peer Co. 11 Co. 6 Co. 12 Co. 14 Co. 13 Co. 7 Co. 10 Co. 15 EOG Co. 16
Avg
Source: UBS Investment Research. Based on $49/Bbl WTI and $3.25/MMBtu
Peer Group: APA, APC, CHK, CLR, COG, COP, CXO, DVN, HES, MRO, NBL, NFX, OXY, PXD, RRC and SWN.
EOG_0215-29
Crude Oil*
2015
Bbld
$/Bbl
February 1 to June 30
47,000
$91.22
July 1 to December 31
10,000
$89.98
MMBtud
$/MMBtu
March 1 to March 31
225,000
$4.48
April 1 to April 30
195,000
$4.49
May 1 to December 31
175,000
$4.51
Natural Gas*
2015
* As of February 16, 2015. Does not reflect options held by certain counterparties to extend current crude oil derivative contracts or to enter into
additional natural gas derivative contracts. See reconciliation schedules for details.
EOG_0215-30
Rate-of-Return Focused Investments Drive Shareholder Value Creation
2014 ROE/ROCE > Average of Majors, Integrateds and Independent E&Ps
Ready to Grow When Prices Improve
- Uncompleted Wells
- High-Return Drilling – Eagle Ford, Delaware Basin and Bakken
- Strong Oil Growth 2016+ If Oil Prices Sufficient
Defer Growth Awaiting Higher Price Environment
- Reduce Rig Count and Delay Completions
- Higher Returns and NPV
Seize Opportunities to Improve Competitive Position
- Acquire High-Quality Acreage – Leasing, Farm-In, Acquisitions
- Lower Finding Costs
- Continue Organic Exploration Efforts
EOG_0215-31
Copyright; Assumption of Risk: Copyright 2015. This presentation and the contents of this presentation have been copyrighted by EOG Resources, Inc. (EOG). All rights reserved. Copying of the presentation is
forbidden without the prior written consent of EOG. Information in this presentation is provided "as is" without warranty of any kind, either express or implied, including but not limited to the implied warranties of
merchantability, fitness for a particular purpose and the timeliness of the information. You assume all risk in using the information. In no event shall EOG or its representatives be liable for any special, indirect or
consequential damages resulting from the use of the information.
Cautionary Notice Regarding Forward-Looking Statements: This presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. All statements, other than statements of historical facts, including, among others, statements and projections regarding EOG's future financial position, operations,
performance, business strategy, returns, budgets, reserves, levels of production and costs, statements regarding future commodity prices and statements regarding the plans and objectives of EOG's management for
future operations, are forward-looking statements. EOG typically uses words such as "expect," "anticipate," "estimate," "project," "strategy," "intend," "plan," "target," "goal," "may," "will," "should" and "believe" or the
negative of those terms or other variations or comparable terminology to identify its forward-looking statements. In particular, statements, express or implied, concerning EOG's future operating results and returns or
EOG's ability to replace or increase reserves, increase production, generate income or cash flows or pay dividends are forward-looking statements. Forward-looking statements are not guarantees of performance.
Although EOG believes the expectations reflected in its forward-looking statements are reasonable and are based on reasonable assumptions, no assurance can be given that these assumptions are accurate or that any
of these expectations will be achieved (in full or at all) or will prove to have been correct. Moreover, EOG's forward-looking statements may be affected by known, unknown or currently unforeseen risks, events or
circumstances that may be outside EOG's control. Important factors that could cause EOG's actual results to differ materially from the expectations reflected in EOG's forward-looking statements include, among others:
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the timing, extent and duration of changes in prices for, and demand for, crude oil and condensate, natural gas liquids, natural gas and related commodities;
the extent to which EOG is successful in its efforts to acquire or discover additional reserves;
the extent to which EOG is successful in its efforts to economically develop its acreage in, produce reserves and achieve anticipated production levels from, and optimize reserve recovery from, its existing and future
crude oil and natural gas exploration and development projects;
the extent to which EOG is successful in its efforts to market its crude oil, natural gas and related commodity production;
the availability, proximity and capacity of, and costs associated with, appropriate gathering, processing, compression, transportation and refining facilities;
the availability, cost, terms and timing of issuance or execution of, and competition for, mineral licenses and leases and governmental and other permits and rights-of-way, and EOG's ability to retain mineral licenses
and leases;
the impact of, and changes in, government policies, laws and regulations, including tax laws and regulations; environmental, health and safety laws and regulations relating to air emissions, disposal of produced
water, drilling fluids and other wastes, hydraulic fracturing and access to and use of water; laws and regulations imposing conditions or restrictions on drilling and completion operations and on the transportation of
crude oil and natural gas; laws and regulations with respect to derivatives and hedging activities; and laws and regulations with respect to the import and export of crude oil, natural gas and related commodities;
EOG's ability to effectively integrate acquired crude oil and natural gas properties into its operations, fully identify existing and potential problems with respect to such properties and accurately estimate reserves,
production and costs with respect to such properties;
the extent to which EOG's third-party-operated crude oil and natural gas properties are operated successfully and economically;
competition in the oil and gas exploration and production industry for employees and other personnel, facilities, equipment, materials and services;
the availability and cost of employees and other personnel, facilities, equipment, materials (such as water) and services;
the accuracy of reserve estimates, which by their nature involve the exercise of professional judgment and may therefore be imprecise;
weather, including its impact on crude oil and natural gas demand, and weather-related delays in drilling and in the installation and operation (by EOG or third parties) of production, gathering, processing, refining,
compression and transportation facilities;
the ability of EOG's customers and other contractual counterparties to satisfy their obligations to EOG and, related thereto, to access the credit and capital markets to obtain financing needed to satisfy their
obligations to EOG;
EOG's ability to access the commercial paper market and other credit and capital markets to obtain financing on terms it deems acceptable, if at all, and to otherwise satisfy its capital expenditure requirements;
the extent and effect of any hedging activities engaged in by EOG;
the timing and extent of changes in foreign currency exchange rates, interest rates, inflation rates, global and domestic financial market conditions and global and domestic general economic conditions;
political conditions and developments around the world (such as political instability and armed conflict), including in the areas in which EOG operates;
the use of competing energy sources and the development of alternative energy sources;
the extent to which EOG incurs uninsured losses and liabilities or losses and liabilities in excess of its insurance coverage;
acts of war and terrorism and responses to these acts;
physical, electronic and cyber security breaches; and
the other factors described under Item 1A, “Risk Factors”, on pages 13 through 20 of EOG’s Annual Report on Form 10-K for the fiscal year ended December 31, 2014 and any updates to those factors set forth in EOG's
subsequent Quarterly Reports on Form 10-Q or Current Reports on Form 8-K.
In light of these risks, uncertainties and assumptions, the events anticipated by EOG's forward-looking statements may not occur, and, if any of such events do, we may not have anticipated the timing of their occurrence
or the extent of their impact on our actual results. Accordingly, you should not place any undue reliance on any of EOG's forward-looking statements. EOG's forward-looking statements speak only as of the date made,
and EOG undertakes no obligation, other than as required by applicable law, to update or revise its forward-looking statements, whether as a result of new information, subsequent events, anticipated or unanticipated
circumstances or otherwise.
Oil and Gas Reserves; Non-GAAP Financial Measures: The United States Securities and Exchange Commission (SEC) permits oil and gas companies, in their filings with the SEC, to disclose not only “proved” reserves
(i.e., quantities of oil and gas that are estimated to be recoverable with a high degree of confidence), but also “probable” reserves (i.e., quantities of oil and gas that are as likely as not to be recovered) as well as
“possible” reserves (i.e., additional quantities of oil and gas that might be recovered, but with a lower probability than probable reserves). Statements of reserves are only estimates and may not correspond to the
ultimate quantities of oil and gas recovered. Any reserve estimates provided in this presentation that are not specifically designated as being estimates of proved reserves may include "potential" reserves and/or other
estimated reserves not necessarily calculated in accordance with, or contemplated by, the SEC’s latest reserve reporting guidelines. Investors are urged to consider closely the disclosure in EOG’s Annual Report on
Form 10-K for the fiscal year ended December 31, 2014, available from EOG at P.O. Box 4362, Houston, Texas 77210-4362 (Attn: Investor Relations). You can also obtain this report from the SEC by calling 1-800-SEC-0330
or from the SEC's website at www.sec.gov. In addition, reconciliation and calculation schedules for non-GAAP financial measures can be found on the EOG website at www.eogresources.com.